Carnival Orders $500M Vessel for Princess

Monday, April 28, 2003

Princess Cruises will construct a new 116,000-ton cruise ship, a sister to the Caribbean Princess, which will be built at Fincantieri's Monfalcone yard. Built at an approximate all-in cost of $500 million, the new vessel is expected to be delivered in May 2006. By
utilizing an existing hedge against the euro, the new Princess vessel will
be built at approximately 92 cents to the euro versus the current
exchange, which is approximately $1.10 today.
In addition, the company has reduced the number of Holland America's
"Vista-class" vessels from five to four. Holland America's Vista-class
includes the Zuiderdam, introduced last year, along with three other
newbuilds scheduled to enter service through early 2006.
"The addition of four Holland America 'Vista-class' vessels will result in a
59 percent capacity increase over a three-and-a-half-year period, which is a
more rational growth rate for an up-market premium brand," said Micky
Arison, chairman and CEO of Carnival Corporation & plc.
The company has also stretched out the delivery of three cruise ships being
constructed at Italy's Fincantieri shipyard. The vessels with adjusted
deliveries include: Carnival Cruise Lines' Carnival Valor - delivery
adjusted from Sept. 2004 to Dec. 2004; Cunard Line's Queen Victoria -
delivery adjusted from Jan. 2005 to March 2005; and Holland America Line's
fourth "Vista-class" vessel - delivery adjusted from Oct. 2005 to Jan. 2006.
This realigned newbuilding schedule further demonstrates Carnival's
flexibility, allowing it to maximize its newbuilding program especially when
it encompasses multiple companies building ships at the same yard.
"We're less than two weeks into the new Carnival/P&O Princess combination
and we are already working on optimizing asset utilization to benefit the
brands and maximize returns for the group," said Arison.
"The reality is that we would have scheduled our deliveries differently had
we been making decisions for this portfolio of brands two years ago. Slowing
down the delivery schedule gives us a more rational and efficient timetable
to absorb additional capacity. It is also a testament to our excellent
relationship with Fincantieri, which has shown incredible flexibility in
working with us in accommodating this new schedule. Eleven of our 17
newbuilds are under contract with Fincantieri and the level of cooperation
they have demonstrated only serves to further strengthen our business
partnership," Arison stated.